What Does Full Coverage Cover on Auto Insurance?

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Full coverage insurance is typically known as carrying collision and comprehensive insurance. Either coverage can be purchased by themselves, but both or full coverage must be maintained when there is a lienholder involved, that is when you are making payments on a car loan.

Benefits

  • You are not required to carry collision coverage by law, but if you have a vehicle that is valuable or expensive to replace or repair, purchasing full coverage may save a lot of money in the event of damage to or loss of your car.

Collision Coverage

  • Collision coverage is activated when you collide with something. This could be another car, a deer on the road, a telephone pole or another property. Payment for damages will be made to repair or replace your car and the car or property of the other party or parties involved.

Comprehensive Coverage

  • Comprehensive coverage includes damage to your vehicle due to flood, storm, hail, fire, vandalism or theft.

Exclusions

  • Certain drivers may be excluded or not covered in the event of an accident. For example, if a family member with a history of DUI convictions and a suspended driver's license wrecks your car, your carrier may deny your claim.

Drawbacks

  • Full coverage insurance for your vehicle is much more expensive than liability insurance, which covers only the other party's property and medical expenses. Normally there is a deductible of at least $250 and up to $1,000.

References

  • Photo Credit "My Tesla Arrived!" is Copyrighted by Flickr user: jurvetson (Steve Jurvetson) under the Creative Commons Attribution license.
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